by Linda Straker
- Annual cost of public transportation subsidy will be EC$12 million
- Government will give up several millions in revenue by exempting VAT on 20 basic items
- Government’s strategic priorities for 2025 Budget year outlined in 2023–2025 Medium-term Action Plan
Finance Minister Dennis Cornwall said that Grenada’s 2025 budget of EC$1,912,872,014 is fully financed, and the primary deficit, including grants of EC$208.6 million, will be funded through borrowings.
This is Grenada’s most extensive Estimates of Revenue and Expenditure. The breakdowns show recurrent expenditure (excluding principal repayments) is budgeted at $1,105.9 million, which is a 20.6% increase over the 2024 estimate.
“I am pleased to report that the 2025 budget is fully financed. Of note, the over-deficit of EC$337.4 million will be largely financed from drawdowns from some EC$287.3 million of Government deposits held in the Consolidated Fund,” Cornwall told Parliament while presenting the annual Estimates of Revenue and Expenditure for 2025 during today’s sitting of the Lower House.
The Government’s strategic priorities for the 2025 Budget year according to Cornwall are outlined in the Medium-term Action Plan (MTAP) for 2023–2025, the second in a series of five rolling 3-year MTAPs designed to guide the implementation of priority programmes and projects aligned with the high-level strategic actions of the National Sustainable Development Plan (NSDP) 2020–2035 and Vision 75.
The key priorities for the 2025 budget are as follows:
- Reconstruction and Recovery in the aftermath of Hurricane Beryl
- Education and Skills Development, Youth Empowerment
- Health and Wellness
- Physical and Digital Infrastructure
- Agriculture, Food Security and the Marine Industry
- Culture & the Creative Industry
- Energy Transition and Environmental Sustainability
- Economic Growth, Job Creation, Social Protection and Citizen Safety and Security
The Finance Minister told the House that the near-term economic outlook is favourable, with real GDP expected to accelerate in 2025, reaching 4.1%, driven by continued strong tourism demand and recovery and reconstruction activities. He said that notwithstanding the high risk of reversals of inflation gains, consumer prices are projected to moderate further, averaging 2% this year.
The overview of the budget states an expansionary fiscal stance is needed to support the resilient recovery post Hurricane Beryl. “This will require a temporary weakening of the fiscal position, with a primary balance deficit of $208.6 million or 5.1% of GDP forecasted,” said the overview which was outlined by the minister in his presentation.
Cornwall said that the biggest share of the budgeted amount will be going towards public debt and when it comes to ministries’ allocation, the biggest share will be given to the Ministry of Education, followed by the Ministry of Infrastructure, Physical Development, Public Utilities, Civil Aviation and Transportation which are receiving 9.6% and 8.1% respectively.
Fourth in line is the Ministry of Finance with 8.3%, then the Ministry of Social and Community Development and Gender Affairs, and the Ministry of Carriacou and Petite Martinique with 4.4% and 2.3%, respectively.
Presented under the theme “Toward Vision 75: Grenada Resilient and Rising,” Cornwall said that Government will be giving up several millions in revenue exempting Value Added Tax (VAT) on 20 basic items, and by keeping the tax on petrol at EC$3.50. These 2 taxes will see Government giving up over EC$20 million.
Government will also be introducing a public transportation subsidy which will bring benefits to commuters as well as bus operations. “Through this initiative, the Government through the transport commission will provide direct subsidies to bus operators to help offset the increasing cost of fuel and maintenance,” said Cornwall, who announced that the annual cost of the subsidy will be EC$12 million.
